Home HISTORY FORM 2 INDUSTRIAL CAPITALISM

INDUSTRIAL CAPITALISM

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At the end of this topic student should be able to:

1. Explain the meaning of industrial capitalism
2. Explain the demands of industrial capitalism
3. Explain the roles of the agents of industrial capitalism in preparing Africa for
colonisation

The Meaning of Industrial Capitalism.

Capitalism is the social, political and economic system based on private ownership of the major
means of production. It first developed in Europe during the fifteenth century when feudalism
collapsed.
Under the capitalism system companies and individuals own and direct most of the resources
used in production of goods and services. Capitalism underwent different stages before reaching
its maturity. These stages included:

  • Commercial or mercantile capitalism
  • Industrial capitalism
  • Monopoly capitalism

The commercial or mercantile capitalism took place between the year 1500 and 1750 this was
capitalism based on trade. The merchants obtained wealth through trade activities. A lot of
wealth was accumulated during this period and therefore increased new demands that resulted
into development of another stage of capitalism known as industrial capitalism.
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The next stage was industrial capitalism; this was the period when machines begun to be used for
production in industries. The transition to industrial capitalism was the period when mercantile
capitalism was giving way to industrial capitalism.

The transition was manifested by five major events namely:

  • Political revolution
  • Agrarian revolution
  • Demographic revolution
  • Commercial revolution
  • Transport revolution

Therefore, the above mentioned revolution created a conducive condition for capitalism to enter
in the second stage; industrial capitalism. This new stage was characterised by intensive
competition among the industrial capitalists. They were competing in terms of production of
goods and profit maximisation. This stage of industrial capitalism took place between the 1750s
and 1870s.

The Demands of Industrial Capitalism.

There were several demands of industrial capitalism, but most of them were mainly economic.
These included:

  • The need for raw materials
  • Markets
  • Areas for investment
  • Cheap labour

At the period of industrial capitalism there were also changes in the methods of production of
commodities that the world was demanding in increasing quantities.

The new methods of production involved the invention of machinery and the investment of huge
capital. Industrial capitalism began in England by the end of eighteenth century; other countries
such as French, Italy, German and Belgium were growing into industrial nations.
This necessitated the high demand of industrial capitalism to advance several demands as
explained below:

The need for raw materials.

This was caused by increasing production due to expansion of industries which needed large
quantities of raw materials supply. These materials included cotton, coffee, tea, iron ore, palm
oil, sisal, sugar cane, tobacco and rubber.
The available raw materials could not meet the demand. At the same time they could not be
produced in Europe at large quantities. This resulted into the search and control of the sources of
raw materials.

The need for markets.

Due to the investment of capital in production, industrial goods flooded the European markets.
Overproduction and under consumption became a critical problem among the industrial
capitalists hence they were forced to look for markets outside Europe.

Areas for investment.

Due to unreliable markets and high concentration of capital in Europe, profit marginalization
occurred. As a solution new areas for investment were needed among other areas, Africa
provided the best areas for investment of such capital
In Africa the tropical crops could do better compared to other countries it was also a good source
for non agricultural raw materials such as minerals and forest products.

Need for cheap labour.

Due to labour consciousness caused by working class in Europe and Britain in particular, the
need to search for cheap labour become important. This was a measure taken to compete in
production for profit maximisation

 

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